European shares fell in afternoon trading on Tuesday after data showed new construction of U.S. homes rose by less than expected in September.

At 1236 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was down 0.2 percent after hitting a one-year high of 1,031 earlier in the session.

The U.S. Commerce Department said housing starts rose 0.5 percent to a seasonally adjusted annual rate of 590,000 units, below market expectations for 610,000. August's housing starts were revised down to 587,000 units from the previously reported 598,000 units.

Financial stocks were among top losers. HSBC (HSBA.L), Barclays (BARC.L), Lloyds (LLOY.L), Royal Bank of Scotland (RBS.L), BNP Paribas (BNPP.PA) and Credit Agricole (CAGR.PA) fell 0.3 to 5.3 percent.